Comment on Wolfgang Merkel, “Is capitalism compatible with democracy?”

Excerpt

The points of agreement between Merkel (2014) and Streeck (in this issue) in their respective article and commentary are far more important than their differences: capitalism and democracy can be antagonistic but constructive partners, and have been such in limited times and places; but the conditions for their mutual compatibility are rather strict. As Merkel points out, if economic inequality goes beyond a certain point, it threatens the operation of democracy; if democracy’s control over private property goes beyond a certain point, it threatens the viability of capitalism. In today’s advanced societies there is little danger of the second, as the social groups who might feel disadvantaged by a regime of private property are weak and powerless, unlike the growing mass of industrial workers who mounted socialist challenges to late nineteenth and early twentieth century capitalism. Also, the disastrous history of the Soviet bloc stands as a clear warning of the likely consequences of concentrating all economic resources in the hands of the state. The threat to democracy from financialized globalization and the growing inequality that is its consequence is however real and upon us. It is even possible that it is already too late to save democracy from being anything other than a façade for the operation of private economic power. Capitalism and democracy have become decoupled, and the former is dominating and reducing to the margins the scope of the latter. Financialization and globalization have been the driving forces, neoliberalism the ideological expression, of this process. …